Setting Up an EMI Plan: End-to-End Process

An EMI share plan from Capdesk is the fast, simple and safe way to set up your option scheme in the UK.

Best-practice document templates and support from a Capdesk analyst will ensure your EMI share plan follows market standards and regulations. We will assist you with preparing, generating and adopting your EMI share plan.

1. Designing the Share Plan
2. Adopting the Share Plan
3. Registering the Plan With HMRC
4. Configuring Your Capdesk Account
5. Requesting an HMRC Valuation
6. Issuing Options
7. HMRC and Companies House Filings

Designing the Share Plan

If you want a Capdesk EMI Share Plan, Contact your CSM or the Support team to request it and you will be connected with a Capdesk Share Plan Setup Manager.

The Share Plan Setup Manager will request your Articles of Association and Shareholders’ Agreement, as well as schedule a Discovery call. They will also send you an optional pre-call form with setup questions you can answer ahead of the call to streamline the process.

During the Discovery call, the Share plan setup manager will guide you through the necessary preparations, helping you with:

• Assessing whether your company qualifies for EMI - You can review the criteria on Gov.uk. Please note that although the Capdesk Team will help you understand the criteria, you will take final responsibility for the eligibility assessment.
• Designing the share scheme rules - You will need to define details such as equity allocation (with a suitable number of shares relative to your EMI scheme and granting plans), vesting schedules, and leaver policy.

Your Share Plan Setup Manager will prepare the Share plan documents with the information you have provided. These will be customised to the rules of your scheme, within certain parameters. This process takes 3-5 business days.

Deliverables include:

• Share option plan rules
• Notice of option grant
• Notice of exercise

We also provide the following templated documents that may be helpful to adopt the share plan and an Incentive Pool:

• Shareholder resolution for option pool and (if relevant in your case) share subdivision
• Board resolution for adopting share plan
• Investor consent letter

Note that it’s your responsibility to secure board and investor approval by completing and executing these documents. If you wish to customise the adoption templates beyond the instructions provided, we recommend seeking legal advice.

Your Share Plan Setup Manager will be available to answer any questions you may have regarding the Share plan documents and adoption templates for 2-4 weeks after delivering those. They will also propose a training session and send you instructions for next steps.

Adopting the Share Plan

To complete the process, you must legally adopt the Share Plan, authorize incentive pool (if you don't already have one) and (possibly) execute a Share Subdivision as a company.

For this, you will need to have the Board resolution and possibly the Shareholder Resolution and Investor Consent letter signed. This process is handled off Capdesk, but you can download our lawyer-approved document templates for free.

Registering the Share plan with HMRC

Once the share plan is adopted, you will need to register it with HMRC. This is done directly via the HMRC website.

Configuring Your Capdesk Account

If you can complete adoption within 2 weeks after the documents have been provided to you, your Share Plan Setup Manager will handle the tasks on this stage for you. However, if you are not able to formally adopt the plan within this timeline, you can complete these tasks yourself:

1. If it has been executed, you will reflect the share split on Capdesk.

2. At this stage, your Share Plan Setup Manager will have already created your EMI and Unapproved Schemes on the Plans page. We recommend you upload a dated version of the PDF Share Plan Rules and the Executed Board Minutes to each Plan. 

a. Navigate to Equity Awards > Options > Plans.

b. Click on the three-doted button located on the right hand side of the plan > Edit.

c. Upload the document under its respective category and click Save.

3. Your Option Agreements will have also been uploaded to the Document Sets page by your Share Plan Setup Manager. We recommend you upload the dated Share Plan Rules in the Document Set which will be received by your grantholder once you issue them options:

a. Navigate to Equity Awards > Options > Online Document Sets.

b. Click on the three-doted button located on the right hand side of the template > Edit.

c. Navigate to the Static Documents section, click Add document and upload the version of the Plan Rules with the approval date.

d. Create a no restriction plan authorisation.

Requesting an HMRC Valuation

To issue EMI options to employees, you will also need a valuation approved by HMRC, otherwise the tax benefits of EMI are not guaranteed. Typically, EMI valuations are valid for 90 days, so before issuing new options in the future, make sure your valuation report is valid or request a new one.

1. Navigate to Ownership > Valuations and click on EMI & CSOP valuations.

2. Click Request valuation.

3. The Valuations Team will contact you with the next steps, which include submitting the report to HMRC for approval.

Issuing Options

Once you've completed the steps above, you will be able to start issuing options. You can also watch our detailed demo on how to issue options online.

HMRC and Companies Filings

If you executed a share split, you will be able to generate the SH02 filing via Capdesk. Capdesk also allows you to generate EMI Notification and EMI Annual return.